Apppleby’s records show details of financial transactions related to Nimmagadda Prasad, an industrialist from Andhra Pradesh who was arrested in May 2012 as an accused in one of the clutch of cases filed by the CBI against YSR Congress Chief, Y S Jagan Mohan Reddy, an investigation by The Indian Express reveals.

Prasad, who was also named in the “Bahama Leaks” published by the ICIJ-The Indian Express in September 2016, and his brother were found to have floated 28 offshore firms in the Bahamas. But none was then linked to any alleged quid pro quo with politicians in his state for which he spent 17 months behind bars.

Appleby records now connect new dots between Prasad, the Ras Al Khaimah Investment Authority (RAKIA, Ras Al Khaimah is one of the seven emirates that make up UAE); Vanpic (Vodarevu and Nizampatnam Port Industrial Corridor), the company which got 15,000 acres for an industrial corridor; and Lebanese-Swiss national Khater Massad who was Chief Executive of RAKIA and along with Prasad signed all agreements of the Vanpic project.
While Prasad was accused by the CBI, Khater Massad was arrested at the Jeddah Airport in September 2016 on allegations of embezzling $1.5 billion in connection with a project in Georgia. The arrest warrents were issued by the Ras Al Khaimah Government and Massad was given a prison term of 15 months in absentia.

Prasad was named in the fourth of 11 chargesheets filed by CBI between 2012-2014 for favours allegedly taken during the tenure of Y S Rajasekhara Reddy as Chief Minister of Andhra Pradesh. According to the 177-page chargesheet, filed on August 13, 2012, an estimated 22,000 acres were allotted to Prasad in alleged violation of rules and regulations and despite objections from the State Finance Department.

And that as quid pro quo for land concessions, Prasad invested to the tune of Rs 854 crore in companies owned by Jagan Reddy. In 2014, assets of both Y S Jagan Mohan Reddy and Prasad were seized or attached by the Enforcement Directorate. The same year, the Andhra Pradesh Government cancelled the land allotment to Vanpic.
During bail hearings for Prasad in May 2013, the CBI told the court that of the money invested in Jagan’s companies, Rs 140 crore was routed from various Mauritius-based companies into India to be allegedly diverted into companies of Y S Jagan Mohan Reddy. These include Jagathi Publications and Bharathi Cements Corporations Pvt Ltd.
Records show that Appleby administered these Mauritius-based companies incorporated by Prasad and his associates around the same time their deal with RAKIA was being finalized.

Among Appleby data are revealing due diligence documents and overview reports that trace alleged money flows into a complex web of companies and and highlight gaps in accounting practices.

There are reports by Appleby in January 2015 of two Mauritius companies RAK Vision Ltd and RAK Infra Holdings Ltd, both incorporated as private companies in 2008, with a listed purpose to make investments in infrastructure projects in India.

One ‘’overview’’ report prepared by Appleby states that in 2008, RAKIA transferred $110 million to these two Mauritius companies and the “funds were progressively transferred to Indian companies and transferred to related parties to Nimmagadda Prasad.”

Of this amount, $40 million was transferred by RAKIA to RAK Vision and $70 million to RAK Infra. The last transfer of $10 million was done by RAKIA to RAK Infra in 2009.

RAKIA, which had 100% holding in RAK Infra Holdings Ltd, transferred shares worth $71.25 million to Vanpic Ports in June 2009 and shares worth $3.255 million to Prakasam Airport Private Limited (PAPL, a company in which RAK Infra has also invested) in November 2008.

Similarly, Appleby’s report for RAK Vision Ltd shows that from November 2008 to June 2009, lakhs of shares of the company were transferred from the Mauritius companies into three Indian entities linked to Nimmagadda Prasad — Vanpic Shipyard Private Limited; Vanpic Projects Private Limited and Genexx Enpower Corporation Private Limited.

Records also reveal that in August 2013 — months after Nimmagadda’s arrest — Appleby received a letter from the Financial Services Commission (FSC) of Mauritius which stated, “The FSC took note of reports that appeared in relation to Mr Prasad Nimmagadda and of the investigations conducted by Indian Authorities which revealed that Mr Nimmagadda routed money from Mauritius based companies into India. The funds were then diverted and invested in several Indian companies.”

The FSC also wanted to know what “internal checks” had been put on the companies. Appleby data reveals that even before the CBI chargesheet was filed, on July 5, 2013 the Mauritius Revenue Authority (MRA) sent a letter to RAK companies informing them about a request from Indian tax authorities asking for details on their shareholdings and investments made in the Vanpic Group of Companies.

Appleby notes that one of the Directors of RAK Infra Holdings Ltd replied to the MRA informing them that the company had indeed subscribed for shares for a total consideration of $71.25 million in Vanpic Ports.

Response by Nimmagadda Prasad:

“Rak Investment Authority (RAKIA) is the investment arm of Government of Ras Al Khaimah (GoRAK), one of the seven emirates of United Arab Emirates (UAE). GoRAK and the erstwhile Government of Andhra Pradesh (GoAP) entered into an agreement in 2008 on G2G (Government to Government) basis to develop Port and Port based industrial corridor (Vanpic Project) in a socially, economically backward region of Andhra Pradesh. Matrix Enport Holdings Private Limited was chosen by RAKIA as its local partner to execute the project. I am a promoter of Matrix Enport Holdings.

RAKIA planned the investment through Rak Infra and Rak Vision, its Mauritius subsidiary companies considering the tax treaty between India and Mauritius. These companies are controlled and managed by RAKIA.
As a non-resident Indian, I have incorporated separate companies in Mauritius in 2007-08, which still exist. The purpose of these companies is to raise strategic investments for Vanpic Project. However due to global economic meltdown in 2008, I was not successful in inviting strategic investors for the Vanpic Project.

The CBI filed chargesheet in August 2012 and the charges are yet to be framed and consequently trial has not yet commenced. In the meanwhile, based on the CBI chargesheet, Enforcement Directorate provisionally attached certain personal properties and the Vanpic Project properties. PAO is under contest before the appellate authorities.
RAKIA contributed about $120 Million towards its share capital in various Special Purpose Vehicle (SPV) companies of Vanpic Project namely, Vanpic Ports Private Limited, Vanpic Shipyard Private Limited, Genexx Enpower Corporation Private Limited, Vanpic Projects Private Limited and Prakasam Airport Private Limited (PAPL) through its Mauritius subsidiaries namely, Rak Infra and Rak Vision in compliance under automatic FDI route of FEMA regulations. Necessary returns were filed in this behalf with RBI by the investee companies…The FSC raised certain queries in 2012 and we have replied to the same. There is no revert from them since then. I am pursuing the legal remedies in relation to the CBI case. Since the matter is sub-judice, I will not be able to comment further.”